The USD/JPY has risen back to the mid-150 yen range. Takata’s comments from the Bank of Japan’s Monetary Policy Board meeting yesterday caused the dollar-yen to drop by over one yen from the upper 150 yen range to the lower 149 yen range. However, today, Bank of Japan Governor Ueda expressed a cautious stance, stating that “the situation where the achievement of the 2% inflation target can finally be foreseen has not yet been reached” and emphasized the importance of confirmation during the spring wage negotiations. The dollar-yen exchange rate is swinging towards yen weakness, continuing the downward trend from yesterday.
In the New York stock market yesterday, the Nasdaq index showed a strong performance. Today, the Nikkei average demonstrated strong movements, attempting to test the 40,000 yen level, supported by Ueda’s remarks. The mood suggests that the pressure for yen depreciation will continue next week, while it’s important to check the developments in the New York stock market before that.
During the New York session, a series of US economic indicators will be released, including the ISM Manufacturing PMI (February), ISM Manufacturing Business Conditions Index (February), Construction Spending (January), and the University of Michigan Consumer Confidence Index (February, revised). The manufacturing PMI is expected to be 51.5, exceeding the key 50-point threshold for economic assessment, contrasting with the sub-50 levels in both the UK and Europe. Additionally, the ISM Manufacturing Business Conditions Index is expected to rise from 49.1 to 49.5. Depending on the results, it is anticipated that these figures could provide some support for the dollar.
In terms of speaking events, there are numerous opportunities for speeches by US monetary officials, including Holzmann, the Governor of the Austrian Central Bank, Barkin, the President of the Richmond Fed, Pilar, the Chief Economist of the Bank of England, Waller, a member of the Federal Reserve Board, Logan, the President of the Dallas Fed, Bostic, the President of the Atlanta Fed, Daly, the President of the San Francisco Fed, Schmidt, the President of the Kansas City Fed, and Koulgla, a member of the Federal Reserve Board.
It’s uncertain whether intentional or not, Takada’s comments from the Bank of Japan’s Monetary Policy Board meeting caused a temporary surge in Japanese buying at the intervention level, so it’s conceivable that other Bank of Japan officials may make similar remarks in the future to suppress upside pressure on the dollar-yen. If effective without actual intervention, using remarks from officials is the most efficient method.
Today’s focus is on the movement of the dollar after the release of the ISM Manufacturing Business Conditions Index. If a significant trend emerges here, I plan to follow it in the short term.
